Mr TEHAN (Wannon) (18:26): I rise tonight to talk on the Fairer Private Health Insurance Incentives Bill 2011. There are three points that I would like to make loud and clear. The first is that what we are debating tonight is an issue of trust—whether we can trust this government to say one thing before an election and then do that after an election. It is sad to say that this private health insurance piece of legislation that we are debating tonight adds to the list of broken promises. I would also like to discuss its implications on the cost of living, which is increasing on a daily basis for Australian citizens. This piece of legislation, sadly, will once again add to this cost of living. The third point I would like to make is about what this bill will do to cost shifting from the Commonwealth to the states. The state governments are already facing increased health costs. The Labor government on coming into power said that they were going to do something about that, that they were going to stop the blame game, that they were going to fix our health system. But what do we see them doing with this piece of legislation? They are moving the cost of health care away from the Commonwealth and onto the states. Those are the three issues that I would like to garner tonight.

I will start on the basic issue of trust. Truth is a five-letter word and I suggest to the Prime Minister—if it is okay, Madam Deputy Speaker—that she might learn how to spell it and act on it because, as we saw with the carbon tax, one thing was said before the last election and one thing was done after it. To be fair to the Prime Minister, on this occasion she was the member of a cabinet. She was not the Prime Minister but she was a member of the cabinet when the decision was made to say one thing before the 2007 election on the private health insurance rebate and then do another thing afterwards. But it was a precursor of what was to come.

Let us look at the letter that Kevin Rudd wrote to the honourable Dr Michael Armitage. I think it is worth just briefly going through it. It says:

Both my Shadow Minister for Health, Nicola Roxon, and I have made clear on many occasions this year that Federal Labor is committed to retaining the existing private health insurance rebates, including the 30 per cent general rebate and the 35 and 40 per cent rebates for older Australians.

Federal Labor will also maintain Lifetime Health Cover and the Medicare Levy Surcharge.

Labor will maintain the existing framework for regulating private health insurance, including the process for approval of premium increases. Zero per cent premium adjustment is not Labor policy;

I understand Nicola Roxon’s office has also confirmed with you that Federal Labor has no plans to require private health insurance funds to make equivalent payments to public hospitals for patients who elect to be treated as private patients.

I trust this allays your concerns. Federal Labor values its relationship with the private health insurance sector and we look forward to this continuing regardless of the election outcome on November 24.

As we know, Kevin Rudd was elected Prime Minister and Julia Gillard became a cabinet minister of the Rudd government.

Mr TEHAN: And later an assassin, as my good friend the shadow minister for tourism so rightly interjects. As soon as they got in—the alarm bell should have been ringing there and then—the spending got out of control and the budget forecast did not look too good, and what was the first thing they did? They looked at the private health insurance rebate as a way of trying to get the budget back into a state which could give some sort of credibility to the Labor government's very poor efforts in managing the economy. Having been quite prepared immediately before the 2007 election to say one thing and then do completely the opposite afterwards, we should have known that this was a precursor of what the government was prepared to do on the carbon tax before the 2010 election.

Sadly, when it comes to this issue of truth, we have also seen it raise its ugly head when it comes to what happened on Australia Day. It seems very hard—

The DEPUTY SPEAKER (Ms K Livermore): Order! The member for Wannon will restrict his remarks to the Fairer Private Health Insurance Incentives Bill.

Mr TEHAN: One of the key points which need to be made on this bill is around the issue of trust.

The DEPUTY SPEAKER: Order! The member can make it in the context of the bill.

Mr TEHAN: The second point that I would like to make refers to cost of living. This piece of legislation will add to the cost of living in this country. Those on the other side may argue that this is a one-off in adding to the cost of living and therefore it is something that needs to be done. But the truth is that it is not a one-off. We have seen the price of insurance rise incredibly in the last three to six months. People have seen their bills go from $500 to $5,000 in the invoices they have been issued in the last couple of months. We have seen electricity prices rising exponentially, and they are going to get worse, sadly. We have seen the cost of child care rising. The cost of living is biting; it is hitting hard. What is the government's answer? To increase it even further. That is what this bill will do.

The sad thing is that the cost-of-living increase will hit those who can least afford it. It will hit the pensioners who save so that they can take out private health insurance and who want to have the surety of knowing that they can get the medical help they desire later in life. They will be the ones who will hang onto private health insurance. They will be the ones who have to put up with the increases in premiums. Because of the cost increase as a result of this decision, the more mobile, younger and healthier people will decide that they do not see a need to continue to take out private health insurance. This will put pressure on premiums. It will put pressure on those who want to take out full coverage—elderly Australians. Premiums will rise as a result of this decision by this government. Sadly, once again, we are going to see cost-of-living pressures on those who can least afford it as a result of this government's policy.

This is not only going to add to the cost of living. It will also add to the healthcare bills of state governments. When Labor was elected in 2007 it said it was going to stop the blame game when it came to the health sector in Australia. For too long, the Labor Party said, the argy-bargy between the states and the Commonwealth had led to the sector declining, to waiting lists growing and to people having to wait in emergency too long to get the attention that they need. Yet what do we see now? Firstly, we see the great reforms that were promised to the health sector amount to nothing. What was finally agreed did nothing to end the blame game. All it did was see the Commonwealth try to take some power off the states in the way the hospital system was managed without providing any real increases in finances to help the states do their job.

Now what are we seeing? We are seeing the Commonwealth come along and once again shift more costs onto the state government. There is no-one who argues against this fact leading to more pressure on our public health system. The Commonwealth should do the right thing by the states and say: 'We are going to take this decision to try to get our budget back in order. We have spent far too much on things like pink batts and school halls. We have wasted billions of dollars. We need to get our budget back in order. Therefore we are going to cost-shift on you. But we are going to do the right thing and help you do that. We are going to give you some of the cost to help you deal with the increased demand that you are going to see in the public health system.' They have not done that, so the states are going to have to cope with the increase in public hospital waiting lists which will occur as a result of this legislation. They are going to have to deal with the increase in demand in the emergency areas of hospitals which will occur as a result of these changes. And what are the Commonwealth doing to help the states deal with that? Nothing. They are blatantly cost shifting, and they need to own up and say that that is what they are doing. That is how desperate they have become to try to get a budget surplus in May, to try for the first time in over 21 years to get a Labor government budget surplus.

The Australian people will not be fooled by the way that this government is going about it. It is smoke and mirrors, and it is doing nothing to fix the structural imbalances that we currently have in the economy. These need to be fixed so that we can have a reduction in the $132 billion of net debt which will peak this year and so that we can see reductions in the way this government spends its money and in the way that it tries to account for getting its budget into surplus.

There are three points we need to look at. The first is the issue of trust, and I will make one simple point on that issue. I quote Nicola Roxon on 26 September 2007:

Federal Labor has made it crystal clear that we are committed to retaining all of the existing private health insurance rebates.

What happened instead? Only a year or so later we saw a complete reversal of that explicit promise that was made to the Australian people before the 2007 election. That decision was made collectively by then Prime Minister Rudd and then cabinet minister Gillard.

The second thing this legislation will do is add to the already growing list of cost-of-living pressures that this government is putting on the Australian people: insurance costs, electricity costs, childcare costs and private health insurance costs. I could go on and on. The third thing that this bill will do is shift costs from the Commonwealth onto the states, and it will do it despite this government saying that it was determined to stop the blame game and to fix the Australian health system once and for all. It was very clear who was raising money, where the money would be spent and how the services would be delivered so that people could point to where the system was and was not working, rather than having the federal government and state government saying, 'The whole issue depends on the service delivery and the costs and you aren't getting that right.'

That is why I stand here today opposing these changes. They are a breach of trust, they will add to the cost of living and, worse than that, they will shift the cost of delivering health care from the Commonwealth to the states at a time when the states need help in delivering the services they want to deliver. They do not need extra costs being put on their health services.